Analysts at Oppenheimer provided their views on Coinbase Global, Inc. (NASDAQ:COIN), focusing on the hidden value of Coinbase Ventures. With the pressure from rising rates and geopolitical tensions, as well as high correlation with the bitcoin price, the company’s shares appear to be largely driven by macro factors instead of fundamentals.

While the analysts believe this phenomenon could persist in the near term, this correlation could break longer term when the company diversifies away from transaction revenue and generates more recurring revenue. The analysts have identified a hidden value in Coinbase Ventures that the market may not have fully appreciated. Based on their analysis, the market value of this portfolio could reach $6.6 billion (or $19/share) vs. the cost basis of $352 million (per Q4/21 balance sheet).

While not a financial contributor at this point, Coinbase Ventures’ investments are strategically important to the company to: (1) support the crypto ecosystem allowing for greater adoption, (2) gain insights into emerging technologies, (3) provide a strong pipeline for M&A, and (4) generate attractive ROIC longer term.